Transcript
Page 1: Things startups need to know if they want to raise capital from Silicon Valley

What  you  need  to  know  if  you  want  to  raise  capital  from  Silicon  Valley  

Jeff Clavier Founder & Managing Partner

Kima Ventures Portfolio Day Dec 9, 2013 – Paris, France

Page 2: Things startups need to know if they want to raise capital from Silicon Valley

SoftTech  VC  in  a  Nutshell  §  Founded in 2004, SoftTech VC has backed 143 seed

stage startups in consumer internet, devices and Saas §  Geographies:

§  80% of the portfolio is in Silicon Valley, 10% is in New-York, the rest is in SoCal, Boulder and Toronto/Waterloo

§  To date: §  30+ companies have generated $1.5B in total exit

consideration §  70+ companies have raised $1.5B in follow-on financing §  Top quartile performer in all funds

SoftTech is very much a startup – it just happens to operate in the VC market. It was bootstrapped for 3 years (Fund I) – and then scaled by raising $155M (Fund II, III, IV). And yes, it had zero chance of being a success.

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Jeff Clavier

Charles Hudson

Stephanie Palmeri

Page 3: Things startups need to know if they want to raise capital from Silicon Valley

A  few  SoftTech  Exits  

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Acquired by Acquired by Acquired by

July 10 May 10 Dec 09

Acquired by

Apr 13

Acquired by

Dec 10

3

Acquired by

Oct 11

Acquired by

Feb 12

Acquired by

Jul 12

Acquired by

Aug 12

Acquired by

Aug 12

Acquired by

Jul12

Acquired by Acquired by Acquired by Acquired by Acquired by Acquired by

Dec 05 Aug 06 Dec 06 Aug 07 Aug 07 Dec 09

Acquired by

July 10

Page 4: Things startups need to know if they want to raise capital from Silicon Valley

If  you  remember  ONE  thing  from  this  talk  

“The only real mistake is not trying, anything else is part of an entrepreneur’s journey”

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Page 5: Things startups need to know if they want to raise capital from Silicon Valley

Here  Is  the  SV/NY  Funding  Ecosystem  

Pre-Seed < $500K

• Bootstrapping/Friends and family/Crowdfunding • Incubators and Accelerators (YC, Techstars, AngelPad, SeedCamp)

Seed $1.2 to $2.5M

• Syndicates of micro-VC firms, angels and (potentially) traditional VCs • AngelList and Crowdfunding services as alternative or “fill up” opportunity

Series A $4M tp $10M

• One traditional VC, with micro VCs investing pro-rata and adding strategic angels • Family Offices, Strategics, Micro-VCs + Crowdfunding pools as alternative

Series B $6M to $15M

• Another traditional VC (or two), with insiders coming in for pro-rata • Same mix as Series A for alternatives

Growth $20M+

• Mix of traditional/growth VCs, PE firms, hedge funds. In parallel, secondary transactions. • Alternative: direct co-investments from LPs, hedge/mutual funds, cash rich corporates

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Page 6: Things startups need to know if they want to raise capital from Silicon Valley

Challenges  to  Raising  Capital  in  the  US  

§  Visas for Founders and Executives

§  Financeable Idea: Big, Bold, Global Vision

§  Limited/Inexistent Network for employees and investors referral

§  Team/Product Credibility vs. Traction

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Page 7: Things startups need to know if they want to raise capital from Silicon Valley

Two  Practical  Ways  To  Get  To  The  Valley  

As an Employee §  Get a large US co to sponsor

your visa and move you §  Network your way into the

local community of entrepreneurs and investors

§  After 2 to 4 years, you’re local and you can figure out your way into a new visa, startup, funding, etc.

§  Takes time, but works well if you are committed to the US

As an Entrepreneur §  Raise seed financing in

France/Europe for a global product, validated locally

§  Raise a Series A/B in Europe with a global footprint target

§  Raise a Series B/C in the US to expand/grow

§  If your startup has 2+ years, transfer visas (L) is a possibility

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Page 8: Things startups need to know if they want to raise capital from Silicon Valley

What  Silicon  Valley  Investors  Consider  

§  Market Opportunity

§  Vision

§  Team/Bench

§  Traction

§  Competition

§  Distribution

§  Marketing

§  Monetization

§  Economics

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Page 9: Things startups need to know if they want to raise capital from Silicon Valley

What  Silicon  Valley  Investors  Consider  

§  Market Opportunity §  Huge ($Bs)

§  Vision §  Big, Ballsy, Impactful

§  Team/Bench §  World class/Experienced

§  Traction §  Proof that the shit works

§  Competition §  Know your ecosystem

§  Distribution §  Most critical

§  Marketing §  What’s unique about yours

§  Monetization §  What brings the dough

when

§  Economics §  Do the CAC vs. LTV maths

work

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Page 10: Things startups need to know if they want to raise capital from Silicon Valley

Big  No-­‐No’s  

§  Expecting we’ll move you §  Most investors will want to

see commitment to US

§  Traction in France is enough to get US funding §  Need global ambition and

European traction

§  Assume every VC is a potential investor §  Previous European deal is

a strong indicator

§  Expecting that it’s easy §  Convincing US investors

is unbelievably hard §  Research how it worked

for SoundCloud, Klarna, Unity, Criteo, Songkick, Skype, Rovio, etc.

§  A detail: the Exit slide in the deck §  We’ll show you the exit…

door

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Page 11: Things startups need to know if they want to raise capital from Silicon Valley

Finally  a  Few  Recommendations  

§  You need to understand the “right” source and amount of funding for your startup §  Based on the vision and market opportunity §  Depending on your stage, and industry

§  Crunchbase and AngelList are great sources of information re who funded what

§  Remember: most professional investors will only consider opportunities coming through a referral §  Other successful European entrepreneurs are probably best

§  Incubators offer a real opportunity to get early stage financing in the US

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Page 12: Things startups need to know if they want to raise capital from Silicon Valley

Any  Questions?  


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